HOME > ALCP News
Harmonize, but do not Harm!

From the ISET Economist news (http://www.iset.ge/news/?p=4633)

By Eric Livny

The “do no harm” (primum non nocere) principle is well known to students of medical schools. It is one of the most fundamental maxims in medicine, as formulated, for example, in the Epidemics book of the Hippocratic Collection:

“The physician must … have two special objects in view with regard to disease, namely, to do good or to do no harm“.

Doctors are taught that medical interventions are not risk-free. Thus, when facing a “problem” one should consider whether to use a particular procedure (e.g. surgery or chemical treatment) or do NOTHING.

Not surprisingly, this very principle has applications in many fields other than healthcare. And it is high time for this principle to be studied and applied in Georgian policymaking.

THE HARM OF OVERZEALOUS “HARMONIZATION”

Ever since signing the EU Association agreement in June 2014, Georgia has embarked on a spree of initiatives seeking to “harmonize” Georgia’s legislative and regulatory environment with EU’s acquis communautaire. The aim, so it appears, is to instantly transform Georgia into a European nation.

It all started on September 1, 2014, with the introduction of new VISA AND RESIDENCY REQUIREMENTS, modeled – so the Georgian public was told – after the best EU regulations, and intended to meet EU requirements as part of the visa liberalization process.

Within just a few months, several other pieces of legislation have been drafted and submitted to parliament (a few more may be in the pipeline without any knowledge on the part of relevant businesses and civil society stakeholders), allegedly as part of the harmonization effort.

  • A new law onLABOR MIGRATION, submitted to the Georgian Parliament in early 2015, sought to prevent trafficking (a goal consistent with Georgia’s obligations under the visa liberalization plan), but also (Article 16) to restrict the ability of Georgian companies to hire badly needed international experts. Hard to imagine, but true! Thanks to a concerted communication effort by the Georgian business community, and goodwill on the part of the Ministry of Economy and Sustainable Development, Article 16 was swiftly removed from the draft law.
  • Recent amendments to the Georgian law onBROADCASTING (Article 64 § 2) restrict sponsorships and limit advertising to 12 minutes per hour. The idea to reduce advertising time to somewhat more civilized levels is consistent with EU rules, yet Georgia seems to be in a particular hurry to tick off this harmonization box. Whereas the Association Agreement talks about gradual “approximation” over a period of 3-5 years, Georgian parliamentarians opted to dramatically accelerate the process by making these truly life-saving amendments effective almost immediately (as of April 1, 2015). Instead of creating harmony, this kind of fast-track overzealous approximation does not allow private broadcasters any time for adjustment, jeopardizing their ability to generate income, produce high quality content, and maintain independence. Unfortunately, suggestions by Rustavi 2 and other TV channels to stagger reductions in advertising time over several years have so far fallen on deaf ears.
  • Yet another example of rushed legislation that appears to ignore the interests of businesses concerns the recent decision to increase EXCISE TAXES ON ALCOHOL AND TOBACCO as of January 1, 2015. The Government’s official aim was to increase budget revenues while harmonizing Georgia’s regulatory environment with that of the EU. Yet, the manner in which the whole process was rushed raises many questions. Georgian companies were not allowed any time to adjust their investment and production decisions, leaving them with excess capacity and losses. Furthermore, the level of excise taxes on alcohol was set at a level exceeding that of many European nations. This was decided without examining relevant demand elasticities, that is, the extent to which higher taxes will affect sales and budget revenues. In a country with rich traditions in home production of high quality alcoholic drinks (that are not subject to excise taxes), demand for alcohol is likely to be quite a bit more elastic than in most European nations. After all, Georgian consumers can switch to homemade wine or chacha, spelling doom for Georgian government’s plans to raise an extra 100mln GEL in excise tax revenue.

A COMMON PATTERN?

Taken alone, none of these legislative initiatives are particularly damaging for the Georgian economy. Georgian companies would have quickly acquired the ability to handle the extra layer of bureaucracy when bringing foreign experts and workers. Broadcasters will raise per minute prices for advertising and sponsorships, and advertising companies will learn to deliver their marketing messages in fewer seconds. Forced to pay higher excise taxes, Georgians will drink less beer and more wine. Breweries will adjust production volumes or export to Azerbaijan. The Association Agreement will be implemented ahead of schedule. At least on paper.

The problem with all these initiatives is that they represent a pattern of policymaking that is very different from the European ideal which Georgia is supposed to aspire to. And, taken together, they defeat the very purpose they are supposed to serve: bring Georgia into the European family of nations.

First and foremost, the manner in which these new regulation are enacted undermines Georgia’s reputation as a great place to do business. A key consideration for new investors is stability and predictability of the business environment. Countries may certainly change their internal regulations from time to time, but this should be done in coordination with the business community, while listening to companies and allowing them sufficient time to adjust.

Second, Georgian policymakers should learn to do much better homework before coming up with new laws and regulations. To do no harm, doctors may prescribe additional X-ray or blood tests. Policymakers can employ standard tools of applied economics analysis to simulate the impact of proposed regulations on tax revenues, GDP, income and investment levels, as well as evaluate associated corruption risks. While common in Europe, none of these tools are used in Georgia. Yet another good possibility is to move in small steps, conducting policy experiments and assessing their impact.

Third, unless dealing with urgent or complicated technical matters (such as Lari devaluation), Georgia’s policymaking process could benefit from greater participation by interested parties. Practically all EU approximation measures could and should be subjected to a lengthy and inclusive process of public consultations that would increase their chances to be politically accepted. In fact, such consultations are explicitly encouraged by the EU Association Agreement.

Last but not least, the hasty attempts to tick off boxes on EU harmonization may undermine the very process of Europeanization the Georgian government is trying to promote. The use of the Association Agreement as a smokescreen for passing dubious laws not only harms Georgia’s immediate economic interests, but also plays into the hands of those political forces that aspire to bring Georgia back into the Russian fold.

*  *  *

The other day, I heard Giorgi Kadagidze, the governor of the National Bank of Georgia, speaking about the need for Georgia to grow at a faster pace, and how faster growth is predicated on the government’s ability to implement painful and costly adjustments. The kind of “second-generation” structural reforms envisaged by governor Kadagidze would take time to implement. Until then, however, there are many things the Georgian government could STOP DOING. In this way the government would save taxpayers money, save itself the embarrassment of backtracking and apologizing, and save Georgian businesses the nervous energy and resources that could be put to more productive uses.

It is time for the Georgian policymakers to learn the Hippocratic principle: do no harm!

OTHER NEWS
29/10/2021
J is for Jara

Jara took an honorable place in the Tourism Alphabet of Ajara, a new campaign implemented by the Department of Tourism and Resorts of Ajara AR. The idea is to link all 33 letters of the Georgian alphabet with attractions, locations, food, and activities worth visiting during the whole year. Jara was selected for the letter J.

Letter J will take tourists to Medzibna Village, Keda, where tourists will feel immersed with Jara hives hidden in nature.

'Jara honey is a unique product, it adds cultural value to our region, so it should be a well-packaged tourism product. So far, nothing has been done by the Department of Tourism to promote Jara, travel agencies and guides do not know much about the product, so linking J with Jara will be the first step toward to Jara promotion and awareness raise from our side' -Tinatin Zoidze, chairwoman of the Department of Tourism and Resorts of Ajara.

To boost the promotion, the Department of Tourism and Resorts of Ajara also developed a short video about Jara that will be advertised through their Facebook pageVisit Batumi, tourism information centers and media channels.

05/10/2021
Bulk, Brand and Niche - Georgian Honey Export Begins to Flow

Rebounding in spite of the pandemic, export markets for Georgian honey are beginning to flow and the volume of honey is growing rapidly. In the first eight months of 2021, 117 tonnes of honey were exported to eleven countries; France, Bulgaria, USA, Canada, Hong Kong, Japan, Kazakhstan, Azerbaijan, UAE, Qatar, and Saudi Arabia. Five times more than the  21.7 tonnes of honey, exported to six countries in 2020.

A major recent development has been the establishment of a contract for wholesale bulk honey between Api Geo Ltd in Samtredia and Naturalim France Miel a large honey company in France. In September, forty-three tonnes of honey was shipped to France. A second order is now being prepared for shipment. Strict testing in France and Germany and a new factory and equipment capable of homogenizing 20t of honey at a time mean that the company is the first in Georgia to able to reliably service such a market.

This is just a start; we hope to export at least 100 tonnes of Georgian honey to France this year. We want to supply from smaller-scale beekeepers which will help them with selling their honey, which has been a problem for years in Georgia.’ - Gia Ioseliani, Founder of Api Geo Ltd.

September was also a fortunate month for Kakhetian Traditional Winemaking (KTW) producers of the Nena Honey brand which includes the first Bio-certified Jara honey in Georgia.  The company has just shipped a second large order of six types of Nena honey to Hong Kong, including chestnut, blossom, alpine, linden, Jara and honey with nuts including Bio Jara honey. Nena Bio Jara honey is also on its way to Doha, Qatar. Overall, since January 2021, the company has increased the volume of honey exported by 110%, compared to 2020, to markets in Canada, USA, Hong Kong, Japan, Azerbaijan and Qatar. 

Bio certification of Jara honey in Ajara is receiving considerable governmental backing.

We are proud that export markets for bio-certified Jara honey are growing and now it is being exported to countries like Japan, the USA, and Canada. We started to support Bio-certification of the Jara Beekeepers Association in 2021 to continue to supply diverse export markets for such a flagship product.’ - Giorgi Surmanidze, Minister of Agriculture of Ajara.  

The Jara Beekeepers Association is consolidating its entry into the Japanese market in partnership with MF Company Ltd. In September they exported honey to be shown at an exhibition in Tokyo in October, after which the next order will be placed.

Japanese consumers are loving Jara honey, some of them told us that it helps them with stomach problems. We believe that this exhibition in Tokyo will open up new opportunities for the Jara Beekeepers Association.’ - William Pratt, Co-founder of MF Company Ltd.  

24/08/2021
Fourth Georgian Milk Mark (GMM) Dairy Exports to the USA

Dairy Enterprise Leanka Ltd from Kakheti region sent 837 kg different types of cheese (Sulguni, Smoked Sulguni, Georgian cheese) via the exporter company Geoproduct Ltd for sale in New York and Philadelphia, USA. The dairy is a member of the Georgian Milk Mark the quality assurance label for Georgian natural milk and its products bare the GMM. The company expects further increased orders in the near future.


12/07/2021
Jara Teaching Ready to Go

Eleven Vet colleges with beekeeping programmes have already received Jara equipment from the Georgian Beekeepers Union (GBU) and Jara Beekeepers Association (JBA). These eleven colleges are ready to integrate the Jara materials into their beekeeping programmes some from September this year and others in the spring semester next year.  The Deputy Minister of Education of Georgia, the Minister of Education of Ajara, and the Mayor of Keda visited the Keda VET College and expressed their support to Jara teaching.

‘We received the package of equipment for Jara teaching. The beekeeper students, enrolled last year, are looking forward to getting lessons related to Jara producing; officially, we are starting teaching from a new semester’ – Ilia Kharazishvili, the head of the beekeeping programme at Kachreti College.

The handover of Jara equipment is a follow-up activity of the Training of Trainers in Jara Honey Production for VET Colleges, which was held on May 18th-19th  hosted by the Georgian Beekeepers Union (GBU) and the Jara Beekeepers Association (JBA) in Keda, Medzibna Village. The National Center for Educational Quality Enhancement and sectoral skills organization Agro Duo are supporting the GBU and JBA with Jara teaching integration in the VET colleges.

We started cooperating with the Georgian Beekeepers Union and Jara Beekeepers Association for integrating Jara into our beekeeping programme, however, we are going to involve them in updating the whole beekeeping programme. We need their consultancy to share with us all standards to improve the programme’ - Bela Avalishvili, the head of Opizari VET College in Akhaltsikhe.

These colleges are  VET College at Batumi Shota Rustaveli State University; Black Sea Keda VET College; Black Sea Shuakhevi VET College; VET College Opizari in Akhaltsikhe; VET College Gantiadi in Gori; VET College Aisi in Kachreti; Training Center Farmers' House in Sagarejo, a brunch of Public College Aisi; VET college Iberia in Bagdati; VET College at Shota Meskhia Zugdidi State Teaching University; VET College at Georgian Technical University - Didi Jikhaishi in Imereti; and VET College Horizonti in Guria. 

Last year Akhali Talga VET College in Kobuleti and Khulo integrated the Jara materials into their one-year beekeeping programme, which is attended by twenty-eight beekeeper students. The GBU and JBA also delivered the Jara equipment to these colleges in 2020.

09/07/2021
Georgian Milk Day

On Friday, July 9th, from 10 am until 2 pm, the Business Institute of Georgia (BIG) who manages the Georgian Milk Mark, and the Georgian Milk Federation held a Georgian Milk Day. 

The Georgian Milk Mark which started in 2019 now has twenty one dairies currently using the mark. This B2B (Business to Business) event was to bring together the twenty one dairies who presented their products for show and tasting with invited hospitality and retail sector guests. COVID-19 has taken a toll on both sectors and it is hoped that bringing them together will be advantage to them both, in terms of sales for the dairies and supplying quality Georgian products for the HoReCa and retail sectors.

The Minister of Environmental Protection and Agriculture of Georgia, the Head of the Agrarian Committee of the Parliament, First Deputy Head of Environmental Protection and Natural Resources Committee of the Parliament gave a speech at the opening of the event. The National Food Agency, the State Laboratory of Agriculture, the Rural Development Agency and the Georgian National Tourism Administration participated in the event.  From June 1st 2021 a new regulation requires HoReCa sector actors to become HACCP certified. The NFA had an information desk at the event to answer questions and provide information.Everyone visited the GMM dairies and viewed and tasted their products.

 The event was supported by Alliances Caucasus Programme (ALCP) which is co-financed by the Swiss Agency for Development and Cooperation (SDC) and the Austrian Development Cooperation (ADA) implemented by Mercy Corps Georgia.

Here you can see photos of the event Gallery .

You can see here media reports:

https://bm.ge;

https://www.interpressnews.ge;

https://www.palitranews.ge;

https://mepa.gov.ge;

MEPAGeorgia

https://formula.ge

Businesspartner

07/07/2021
Georgian Honey Export Expands

Georgian Honey under Nena brand has successfully entered the Hong Kong market with a repeat order received soon after the first one. Hong Kong is the new market for Nena honey following USA, Canada, Japan and UAE.

LATEST NEWS
J is for Jara
29/10/2021
Jara took an honorable place in the Tourism Alphabet of Ajara, a new campaign implemented by the Department of Tourism and Resorts of Ajara AR. The idea is to link all 33 letters of the Georgian alphabet with attractions, locations, food, and activities worth visiting during the whole year. Jara was selected for the letter J. Letter J will take tourists to Medzibna Village, Keda, where tourists will feel immersed with Jara hives hidden in nature. 'Jara honey is a unique product, it adds cultural value to our region, so it should be a well-packaged tourism product. So far, nothing has been done by the Department of Tourism to promote Jara, travel agencies and guides do not know much about the product, so linking J with Jara will be the first step toward to Jara promotion and awareness raise from our side' -Tinatin Zoidze, chairwoman of the Department of Tourism and Resorts of Ajara. To boost the promotion, the Department of Tourism and Resorts of Ajara also developed a short video about Jara that will be advertised through their Facebook pageVisit Batumi, tourism information centers and media channels.
Bulk, Brand and Niche - Georgian Honey Export Begins to Flow
05/10/2021
Rebounding in spite of the pandemic, export markets for Georgian honey are beginning to flow and the volume of honey is growing rapidly. In the first eight months of 2021, 117 tonnes of honey were exported to eleven countries; France, Bulgaria, USA, Canada, Hong Kong, Japan, Kazakhstan, Azerbaijan, UAE, Qatar, and Saudi Arabia. Five times more than the  21.7 tonnes of honey, exported to six countries in 2020. A major recent development has been the establishment of a contract for wholesale bulk honey between Api Geo Ltd in Samtredia and Naturalim France Miel a large honey company in France. In September, forty-three tonnes of honey was shipped to France. A second order is now being prepared for shipment. Strict testing in France and Germany and a new factory and equipment capable of homogenizing 20t of honey at a time mean that the company is the first in Georgia to able to reliably service such a market. ‘This is just a start; we hope to export at least 100 tonnes of Georgian honey to France this year. We want to supply from smaller-scale beekeepers which will help them with selling their honey, which has been a problem for years in Georgia.’ - Gia Ioseliani, Founder of Api Geo Ltd. September was also a fortunate month for Kakhetian Traditional Winemaking (KTW) producers of the Nena Honey brand which includes the first Bio-certified Jara honey in Georgia.  The company has just shipped a second large order of six types of Nena honey to Hong Kong, including chestnut, blossom, alpine, linden, Jara and honey with nuts including Bio Jara honey. Nena Bio Jara honey is also on its way to Doha, Qatar. Overall, since January 2021, the company has increased the volume of honey exported by 110%, compared to 2020, to markets in Canada, USA, Hong Kong, Japan, Azerbaijan and Qatar.  Bio certification of Jara honey in Ajara is receiving considerable governmental backing. ‘We are proud that export markets for bio-certified Jara honey are growing and now it is being exported to countries like Japan, the USA, and Canada. We started to support Bio-certification of the Jara Beekeepers Association in 2021 to continue to supply diverse export markets for such a flagship product.’ - Giorgi Surmanidze, Minister of Agriculture of Ajara.   The Jara Beekeepers Association is consolidating its entry into the Japanese market in partnership with MF Company Ltd. In September they exported honey to be shown at an exhibition in Tokyo in October, after which the next order will be placed. ‘Japanese consumers are loving Jara honey, some of them told us that it helps them with stomach problems. We believe that this exhibition in Tokyo will open up new opportunities for the Jara Beekeepers Association.’ - William Pratt, Co-founder of MF Company Ltd.  
Fourth Georgian Milk Mark (GMM) Dairy Exports to the USA
24/08/2021
Dairy Enterprise Leanka Ltd from Kakheti region sent 837 kg different types of cheese (Sulguni, Smoked Sulguni, Georgian cheese) via the exporter company Geoproduct Ltd for sale in New York and Philadelphia, USA. The dairy is a member of the Georgian Milk Mark the quality assurance label for Georgian natural milk and its products bare the GMM. The company expects further increased orders in the near future.
LATEST PUBLICATIONS
MONITORING, EVALUATION, AND LEARNING POLICY
A Gendered National Honey Sector Survey in Georgia
GENDER EQUALITY, DIVERSITY AND SOCIAL INCLUSION STRATEGY (2020-2023)